(TRENTON) – Legislation sponsored by Assembly Democrats Reed Gusciora and Elizabeth Maher Muoio designed to spur the growth of craft distilleries throughout the Garden State was approved Monday by the General Assembly.
The bill (A-2609) would create a restricted distillery license, the holder of which may manufacture, rectify, blend, treat, mix, sell and distribute distilled alcoholic beverages. The restricted distillery license may only be issued to a person or an entity that has identical ownership to an entity that holds a plenary retail consumption license, and only provided that the plenary retail consumption license is located within a Garden State Growth Zone, and is operated in conjunction with a restaurant regularly and principally used for the purpose of providing meals to its customers and having adequate kitchen and dining facilities, and that the licensed restaurant is immediately adjoining the premised licensed under the law.
Five New Jersey cities – Atlantic City, Camden, Passaic, Paterson, and Trenton – are currently designated as Garden State Growth Zone because they either have the lowest median family income or contain a Tourism District established under current law and regulated by the Casino Reinvestment Development Authority.
“Craft distilleries in this state are essentially business startups so allowing them to operate a restaurant on the premises will help them get off the ground by exposing more potential customers to their products and attracting new clientele who might not necessarily be drawn to distilled spirits,” said Gusciora (D-Mercer/Middlesex). “This business model has proved a boon to the brewpub industry and would do much the same for the long-term health of craft distilleries. It will also create an additional draw for our Garden State Growth Zones, both in terms of attracting visitors and creating jobs for residents.”
“Craft distilleries face particular challenges because of the production realities of their product. Many whiskeys and bourbons take to years to age, leaving small distillers little choice but to look to alternative revenue streams to pay the bills until their product is old enough to sell,” said Muoio (D-Mercer/Hunterdon). “Allowing craft distilleries to add restaurants to their facilities will provide economic stability while also attracting visitors, jobs and ratables to some of our most distressed cities. Ultimately, fostering the growth of distilleries in New Jersey will have a positive economic impact all around.”
The craft distillery sector is similar to the craft brewing sector, which has experienced tremendous growth in recent years, leading to beneficial economic activity. According to the Garden State Craft Brewers Guild, the 68 craft breweries currently operating in the Garden State support 9,560 jobs in the state, and generate $1.2 billion dollars in economic impact for the state.
Similarly, the craft distilling industry is currently a growth sector with revenue from the U.S. sales of bourbon, rye whiskey and Tennessee whiskey totaling $2.9 billion in 2015, up 7.8 percent from the previous year and four percent the year before that, according to the Distilled Spirits Council.
The sponsors noted that craft spirits producers are prolific job creators. According to the American Craft Spirits Association, craft producers employ approximately one full time employee for every 700 cases sold, versus the large company ratio of one full-time employee for every 16,000 cases sold. In other words, craft spirits producers employ 21 times more people than large spirits companies on a volume adjusted basis. Estimates hold that the craft distilling industry employs more than 6,000 full-time employees nationwide.
The bill was approved 59-7-3 and now heads to the Senate for further consideration.